Africa Specialty Risks, the pan-African focused insurance and reinsurance group with an operation in Bermuda, has formed a landmark parametric reinsurance partnership with a leading European reinsurer to increase its coverage for vulnerable populations and economies in Africa and the Middle East.

The company’s subsidiary, ASR Re Ltd, is a Class 3A insurer licensed and regulated by the Bermuda Monetary Authority.

The partnership with the European reinsurer was facilitated by Bermudian-based Inver Re, the broking operation founded in 2021 as part of The Ardonagh Group.

Africa Specialty Risks said the agreement would double ASR’s parametric capability for smallholder farmers, natural perils and renewables, with the prospect of further expansion in the future.

Food, water, and environmental security, exacerbated by climate change, represent key challenges for Africa and the Middle East.

Insurance is increasingly being recognised in the key policy circles as an effective remedy, but further insurance penetration is needed.

The company said the parametric approach to reinsurance championed by ASR facilitated the flow of capital to support vulnerable populations.

Raveem Ismail, head of Parametric Underwriting at ASR, said: “This partnership really is a step forward. Although there have been efforts to increase the flow of reinsurance capital into Africa over the past decade, few have come in the context of a commercial entity specifically focused on risks in the region.

“ASR is fully committed to Africa and the Middle East and we are delighted to be able to double our parametric capabilities.”

Bermudian-based Tom Johansmeyer, the global head of Index, Inver Re, said: “It has been an honour and a pleasure to support this new partnership.

“While many are shy of the challenges associated with risks in the Global South, the opportunity is significant and creative thinking can make it more attainable.

“This partnership, built on the strength of ASR’s index development and deal-sourcing capabilities and both parties commitment to Africa and the Middle East, should serve as a model for expanding worldwide reinsurance support for risks in the Global South.”